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Wyckoff Trading Method
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Wyckoff Trading Method

  #281 (permalink)
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StockJock View Post
I can't seem to find this stock on my ThinkOrSwim platform, so I'll use the image you provided. I've marked up your chart to display my best guess of the bar activity. If anyone comes up with something different, please respond. David, what platform are you using and what is the ticker symbol of this stock?





SJ,

Its not a stock. Its the Crude Oil futures. In TOS the symbol is /CL for the continuous contract.

D

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  #282 (permalink)
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hi david



my take on CL 5 min chart ..



we need to see supply take over demand in order to consider the market weak or bearish .. ie distribution ..

an upthrust after a sign of strenght . is just some stopping action .. wich `could` lead to a change in behaviour or trend reverse.. but the story wich unfolds after that action gives us more clues....

also we dont see any preliminary supply on that chart .. wich must be there in order to consider it distribution

check

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  #283 (permalink)
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Video for June 8


I look at Gold again. It seems like it may want to head lower at least for the time being. I also look at crude since it finally made a move.

David



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  #284 (permalink)
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PrymeTyme View Post
hi david



my take on CL 5 min chart ..



we need to see supply take over demand in order to consider the market weak or bearish .. ie distribution ..

an upthrust after a sign of strenght . is just some stopping action .. wich `could` lead to a change in behaviour or trend reverse.. but the story wich unfolds after that action gives us more clues....

also we dont see any preliminary supply on that chart .. wich must be there in order to consider it distribution

check


Pryme,

thanks for the mark-up. It makes sense as you described, but isn't the wide spread down bar on high volume weakness? In real time would we expect to see the next bar push lower if it was going to head lower? Many times I've seen that same type of chart patterns where you have the upthrust type bar where volume is high and it closes fairly low, but it takes time to work itself out before it drops. This time it didn't drop and I'm wondering how to be able to make that distinction. Shold we see heavy supply or follow through very early if it is indeed going to happen?

D

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@StockJock, noticed you used albums to store that screen shot. Here is the easier way:

https://futures.io/help-tutorials-how-tos/10992-how-capture-upload-screenshot.html

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  #286 (permalink)
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David_R View Post
Any Wyckoffians care to tell me what is taking place on this 5 min chart? I see supply entering, but we pop instead of dropping. My only conclusion is that the sideways activity is absorption. Any opinions and what are the clues?

D

I'll give my wyckoff-inspired, though not a pure "wyckoffian" take on this chart. First of all, I really enjoyed the first video, keep up the good work and it's not easy making these videos often is it? :-) For HD, I use camstudio, and you need to record a high resolution video (mine are 1920x1200 usually) for youtube to be able to play them in "HD".

First--for some reason I thought that while Wyckoff did examine individual bars, placing significance on every bar was more of a VSA thing, and the two are not the same. Particularly on 5 minute bars, IMHO not every bar has a meaning or significance that can be attached to it.

In the case of what you're asking, however, the answer is simple. That's the 10:30 oil inventories volume. VSA and Wyckoff can't attach a meaning to volume here, because every Wednesday at this time you will see volume. A look at the delta for the bar shows that despite dropping 50 ticks from the open at the news until the end of the bar 5 minutes later, there was a net neutral delta, meaning that active buying interest was still quite heavy. But from a simpler perspective without getting into delta, which can be interpreted and skewed any number of ways, you have a down bar which closes near support, and then no follow through. A look at the 1m chart will reveal that the movement down had progressively lower volume, and the 10:35 bar which closes that 5m bar is on increased volume, off of previous support 30 minutes earlier, closed in the middle, and was negative delta--this is absorption at its best, I think. On top of that, a 300 tick move in an hour needs a breather, and even oil is unlikely to pop up at this time with the news, so that 5m inventories bar practically had to close down. The timing to move up was not there.

Finally, in your video you seemed to use RTH charts. As I'm sure you're aware, volume analysis has no significant benefit when it's the opening or closing bars of the session, or for news events, as they will almost always have an increase in volume. Wyckoff, to my knowledge, primarily worked on the daily time frame, where no "sessions" take place (though in cases of holidays, for example, low volume must be accounted for). So these volume analyses must be taken into context, I think.

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  #287 (permalink)
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Nice analysis, PrymeTyme. I'm trying to understand how tests are done, so I marked up your chart as I see two tests. Please help me with this.

If I understand Test #1, it tests for supply.
If there is supply, the next bar would be a down bar or if there is no supply, the next bar would be an up bar.

As I understand Test #2, it tests for demand.
If there is demand, the next bar would be an up bar or if there is no demand, the next bar would be a down bar.

Is this why there are two tests? The reason why I ask this is that your analysis seems to be using VSA; whereas, I've tried to use Wyckoff. I would like to understand both. The way you chose your support and resistance is different than mine too.

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Edit: Thanks for you participation, PrymeTyme. I am interested in VSA, but maybe we can discuss this in a thread for VSA. If we can stick with the original Wyckoff method, this would help this thread.


Last edited by StockJock; June 9th, 2011 at 02:28 AM. Reason: Using Original Wyckoff Method
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josh View Post
I'll give my wyckoff-inspired, though not a pure "wyckoffian" take on this chart. First of all, I really enjoyed the first video, keep up the good work and it's not easy making these videos often is it? :-) For HD, I use camstudio, and you need to record a high resolution video (mine are 1920x1200 usually) for youtube to be able to play them in "HD".

First--for some reason I thought that while Wyckoff did examine individual bars, placing significance on every bar was more of a VSA thing, and the two are not the same. Particularly on 5 minute bars, IMHO not every bar has a meaning or significance that can be attached to it.

In the case of what you're asking, however, the answer is simple. That's the 10:30 oil inventories volume. VSA and Wyckoff can't attach a meaning to volume here, because every Wednesday at this time you will see volume. A look at the delta for the bar shows that despite dropping 50 ticks from the open at the news until the end of the bar 5 minutes later, there was a net neutral delta, meaning that active buying interest was still quite heavy. But from a simpler perspective without getting into delta, which can be interpreted and skewed any number of ways, you have a down bar which closes near support, and then no follow through. A look at the 1m chart will reveal that the movement down had progressively lower volume, and the 10:35 bar which closes that 5m bar is on increased volume, off of previous support 30 minutes earlier, closed in the middle, and was negative delta--this is absorption at its best, I think. On top of that, a 300 tick move in an hour needs a breather, and even oil is unlikely to pop up at this time with the news, so that 5m inventories bar practically had to close down. The timing to move up was not there.

Finally, in your video you seemed to use RTH charts. As I'm sure you're aware, volume analysis has no significant benefit when it's the opening or closing bars of the session, or for news events, as they will almost always have an increase in volume. Wyckoff, to my knowledge, primarily worked on the daily time frame, where no "sessions" take place (though in cases of holidays, for example, low volume must be accounted for). So these volume analyses must be taken into context, I think.


Josh,

I use RTH charts because Dr. Gary uses them. He uses tick charts for extended hours. The minute charts with 24 hour data look awful, so I use the RTH, but sometimes will us 24hr.

I agree that the bar by bar volume analysis is more VSA. This is also how Dr. Gary taught his chart reading course. My understanding is that VSA comes from wyckoff, so looking at structure, spreads and volume all come into play. I don't really know whats best to do. I don't want this to be a VSA thread, but I'm not sure what to cover unless I include volume and spread analysis in conjunction with what price is doing. For example, I feel that the move in Crude today has been building up for some time and we have been in the range or accumulation. I think that is more Wyckoff than VSA.

Thanks for the comments. Please continue to do so.

David

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Big Mike View Post
@StockJock, noticed you used albums to store that screen shot. Here is the easier way:

https://futures.io/help-tutorials-how-tos/10992-how-capture-upload-screenshot.html

Mike

Thanks Big Mike,

There's so many ways to do these things. I like choices. I like your videos too.

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Wyckoff Only



David_R View Post
I agree that the bar by bar volume analysis is more VSA. ... I don't want this to be a VSA thread, but I'm not sure what to cover unless I include volume and spread analysis in conjunction with what price is doing. ...

David

I agree with you, David. I think VSA has great value, but I've seen too many discussions start out with Wyckoff and end up overwhelmed with discussion of VSA. We'll never develop a Wyckoff discussion, if we do this. This is not to devalue the VSA method, but the two methods are different. I respectfully request all the VSA followers to allow us to discuss the original Wyckoff method in this thread. This shouldn't be a comparison of the two methods; though, like you said David, there is a slight overlap in concepts.

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